The Euro remains steady following the French government’s survival of two no-confidence votes. The British Pound is experiencing modest support due to slight growth but faces issues stemming from fiscal worries. French political calm has restored market sentiment favouring the Euro. <\/p>\n
As of Friday, EUR\/GBP stands around 0.8700, bolstered by improved sentiment after French Prime Minister S\u00e9bastien Lecornu withstood two no-confidence motions in parliament. This has helped stabilise the Euro against the British Pound. <\/p>\n
In the UK, the economy expanded slightly, with GDP rising by 0.1% MoM in August following a 0.1% decline in July. Industrial Production increased by 0.4% MoM, indicating a minor recovery in manufacturing. However, upcoming tax hikes in the Autumn Budget might dampen domestic demand.<\/p>\n
Eurozone inflation data reveals stable but above-target price pressures, with the Harmonized Index of Consumer Prices (HICP) rising 2.2% YoY in September and core inflation at 2.4%. The European Central Bank suggests limited room for further rate cuts. <\/p>\n
Overall, the current situation favours the Euro, maintaining a steady EUR\/GBP position around 0.8700. The Euro showed the most strength against the British Pound today, with a minor percentage change of 0.06%.<\/p>\n
With French political risk fading for now, we see the path of least resistance for EUR\/GBP as sideways to higher. The key driver is the divergence between a stable Eurozone outlook and mounting fiscal pressure on the UK. This suggests that any dips in the pair towards 0.8650 are likely to be met with buying interest.<\/p>\n
The upcoming UK Autumn Budget is a significant concern, with planned tax hikes likely to dampen consumer spending. We saw the UK\u2019s public debt-to-GDP ratio hover around 93% throughout 2024, a historically high level that limits the government\u2019s fiscal flexibility. This backdrop makes it difficult to be optimistic about the British Pound against a more stable Euro.<\/p>\n
In the Eurozone, inflation remains stubbornly above the European Central Bank\u2019s 2% target, making interest rate cuts unlikely in the near term. The ECB has held its main policy rate firm for several meetings, providing a solid yield advantage that supports the Euro. This policy stance creates a supportive floor for the EUR\/GBP pair.<\/p>\n
Given this view of limited downside and modest upside, traders could consider a bull call spread on EUR\/GBP. Buying a November 2025 call option with a 0.8725 strike price while simultaneously selling a 0.8825 call would be a cost-effective way to position for a gradual move higher. This strategy profits if the pair rises above 0.8725 by expiration.<\/p>\n
Alternatively, for those who believe the pair will remain stable and “well anchored,” selling an out-of-the-money put spread could be effective. Selling a November 2025 0.8650 put while buying a 0.8550 put for protection would generate income if EUR\/GBP stays above 0.8650. This aligns with the historical price action where the mid-0.8600s have provided strong support over the past year.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" The Euro holds firm near 0.8700 as French political stability boosts sentiment; UK growth remains fragile.<\/p>\n","protected":false},"author":62,"featured_media":17033,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-32587","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/32587","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=32587"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/32587\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17033"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=32587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=32587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=32587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}